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What will the new minimum HELP repayment rate mean for PhD graduates?

James Davis

PhD graduates are likely to have the most student debt out of anyone. Regardless, the new loan repayment rates might not be as detrimental as you think.

It was recently decided that the minimum annual salary at which student loans must be repaid will be reduced. Instead of $51,957 pa being the point of repayment, it’ll be $45,800 pa to be repaid at a rate of 1%, with this rate increasing as a number of salary thresholds are reached.

Naturally, this has many students and graduates up in arms. Any new expense is unwelcome, particularly on tight budgets. For the average PhD student for whom employment prospects can be low at no fault of their own in addition to being saddled with undergraduate debt as well, this can be particularly harmful.

Fortunately, the HECS/HELP program Australian PhD graduates enjoy does allow for this quandrie. Given the minimum repayment salary of $45,800, which results in annual repayment rates of $458 or $8.80 per week, PhD graduates needn’t worry about their quantity of debt being a hinderance. Should they lose their job, that’s ok; you don’t need to pay until you meet that threshold again. The nature of this tiered loan system always provides low income earners with the lowest repayment obligation whether or not they owe $20,000 or $100,000.

Further still, PhD graduates can rest assured that should they linger on repayment of debt, it won’t cripple them long-term. This is due to their loans having no interest rate above the natural indexation that occurs as a result of inflation. In short, you’re free to take your time.

The new repayment rate on HELP debts should therefore be hardly noticeable to PhD graduates. It might seem like all doom and gloom, but the nature of student loans in Australia ensures you aren’t being exploited for your PhD.